Business communications provider Viatel has today questioned how the new Coalition Government will be able to fund the UK nationwide rollout of superfast broadband services after it scrapped plans for a controversial 50p +vat per month tax on all fixed telephone lines.

The tax would have raked in approximately £175m per year but was also widely unpopular. Instead the new government has proposed using part of the BBC's TV Licence fee (3.5% Digital Switchover Budget) to fill the gap, although this is worth less (around £130m per year) and would only be used from 2012.

According to Viatel this uncertainty over where funding will come from, and how much there will be, could leave large parts of the country without access to superfast broadband lines for a long time.


Viatel believes that even in those areas where BT's 40Mbps Fibre-to-the-Cabinet ( FTTC ) or full 100Mbps fibre ‘superband’ Fibre-to-the-Premises ( FTTH / P ) services are available, many businesses would still struggle to run delay-sensitive applications like voice and video, as the networks will be subject to the same problems of contention that plague shared networks today.

As it stands the UK Government has two key broadband objectives. Firstly, that virtually every community in the UK will have access to basic broadband connectivity with a "minimum" access speed of 2Mbps being implemented by 2012 (Universal Service Commitment). Secondly, that it is committed to the roll-out of "superfast" broadband in remote areas of the UK at the same time as more densely populated urban areas, including public money for areas where the private sector cannot afford to go.

Broadband Delivery UK (BDUK), the delivery vehicle for the governments broadband policies, will hold a special industry event on 15th July where it aims to provide further details, announce several pilot schemes and discuss the best way forward.